INDIAN ECONOMY IN 2019-20 PERFORMANCE AND POLICIES OF

MODI REGIME

When Narendra Modi became India’s prime minister in spring 2014 the Indian economy was in
the doldrums. There was a clear policy paralysis in India’s central government, in large part due
to the high profile corruption cases that involved the central government bureaucracy and
politicians at the time. Modi promised Indians that “acche din” (good days) were coming. And
there was expectation that the Indian economy would do well under a pro-business political
regime, headed by a politician known for acting strongly and decisively.
“Younger India has aspirations for a stronger India and a stronger person representing India, and
they’re willing to give (Modi) a second chance.”– Marshall Bouton
At the end of prime minister Narendra Modi’s five-year term, he leaves the Indian economy
more or less where he found it: on the slow lane. Joblessness continues to be a thorn in the flesh
of the country, even as overall growth has slowed down. Foreign portfolio investors (FPIs) are
pulling out, and the Indian rupee is on a weak footing. On the flip side, the government has
managed to rein in both inflation and the country’s fiscal deficit

In the meantime, here’s what the numbers reveal about the Modi government’s economic
performance.

ACHIEVEMENTS BY MODI GOVERNMENT

The biggest step by NDA Government is Demonetization of 500 and 1000 rs notes. This step
could reduce black money, eliminated fake currency and led towards cashless economy.

1. There is no mark of corruption or scam on three years of Modi government.

2. PM Narendra Modi being one of the dynamic leaders, managed to improve diplomatic
relations with many countries like Japan, the U.S.A and Afghanistan.
3. Under the NDA government, India has emerged as one of the fastest growing nations
with 7% GDP rate, brought many foreign investment projects like bullet train to India.
4. “Make in India” and “Skill India” programs were launched which helped many citizens
to get jobs, which inturn improved the economy.
5. PM Narendra Modi launched an initiative of “Digital India” trying to connect every
citizen to the vast and beneficial digital world and with the aim to improve transparency
in every sector.
6. With Aadhaar cards, NDA government changed the face of identification system,
Aadhaar is now used everywhere as an identity proof. Though Aadhaar is started by UPA
government, the effective implementation is done by NDA.
7. The government launched “Swach Bharat Abhiyaan” to clean the nation and as a result
many public places, Railway Station, Cities and rivers are way cleaner than before.
8. Many Public Toilets were built to stop open defecation in rural areas.
 9. Goods and Service Tax (GST) the biggest tax revolution since independence. It is a
success as there is fall in the prices of many general commodities.

NDA GOVERNMENT SCHEME :-

1. Pradhan Mantri Jan Dhan Yojana under which citizens opened bank accounts with zero
balance.
2. Pradhan Mantri Gramin Awaas Yojana to give houses to poor people.
3. Pradhan Mantri Krishi Sinchai Yojana(PMKSY) with a mission to improve farm productivity.
4. Atal Pension Yojana to offer pension to all.
5. Pradhan Mantri Ujjwala Yojana which give free LPG connection to women from Below
Poverty Line families.
6. Pradhan Mantri Kaushal Vikas Yojana to give India at least 40 Cr. skilled people by 2022.
7. Sukanya Samridhi Yojana (Girl Child Prosperity Scheme): the primary focus was to make
sure fair share to a girl child with respect to male child in resources and savings of a family.

8. Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency) Yojana: to offer
funding to the non-corporate small business sector.
9. Pradhan Mantri Jeevan Jyoti Bima Yojana an initiative to provide insurance to all citizens.
10. Beti Bachao, Beti Pdahao yojna to educate girl children.
11. Mann Ki Baat – to reflect people’s views.

12. Scrapping of No-Detention Policy was a major step to improve education system.

13. Boosting Travel and tourism through “Incredible India” project which placed India on
40th place globally.

14. The One Rank One Pension (OROP) scheme which was pending through decades was passed
by government.

15. On National Security front, NDA government increased the defence budget from 37.4 billion
dollars to 53.4 billion dollars.

16. The government took a major step by scrapping Planning Commission and introducing Niti
Ayog, bringing 3 and 15 years plans with clear agendas and aim. NITI Ayog turned states into
efficient team members instead of being passive recievers of policies of Central government.
17. India has jumped 30 places and ranked 100th in the World Bank’s ‘Ease of doing business’
ranking.

18. Grievence addressing is improved. Interaction between government and citizens is much
better than before.

NEGATIVES

 The government failed to pass the Land Acquisition Bill under government acquires

private land for development purpose.
 Even after many attempts, government still struggles to bring peace in Kashmir.
 Problem of the Naxalite-Maoist insurgency with the government is still on rise.
 Black Money is not yet retrieved by the government.
 Government failed to eradicate unemployment as it promised during election.
 Government failed to stop the terrorism activates at Line of Control.
 There is still lack of accountancy in Railway department as several times Trains get
derailed under their period.
 Minorities are feeling more insecure than earlier.

Modi has had mixed successes in delivering on his promises. Here’s a breakdown of some
of Modi’s key policies and how he has performed.

1. Demonetization
India’s economic growth has not recovered to the high levels that were witnessed in the first
decade of the 2000s. One important reason for the slow recovery was to do with the Modi
government’s demonetization policy. On November 8 2016, the government withdrew all 500
and 1000 rupee notes from circulation, announcing the issuance of new 500 and 2,000 rupee
banknotes in exchange for the now-defunct old ones.
The aim of demonetization was to deal a death blow to the black economy by reducing the
perceived use of illicit cash to fund terrorism and illegal activities. Instead, the policy led to
a contraction of the Indian economy, and economic growth slowed down to a four-year low in
2018.
Further, by 2018, around 99% of the bank notes that were made invalid had been deposited with
the banking system, suggesting that a large proportion of the 500 and 1000 rupee notes in
circulation were not counterfeit notes or black money, as the government thought. Thus,
demonetization led to a large economic loss without any clear benefits in terms of reducing the
role of the black economy or corruption.

2. Goods and services tax (GST)

The Modi government’s second bold policy step was to launch the goods and services tax (GST)
in July 2017. The aim of the GST policy was to create a common market in India, as opposed to
the many different sales taxes that existed in different Indian states. The initial effect of the
introduction of the GST was negative on the economy. This was especially the case for India’s
large informal sector – which employs the vast majority of people outside of agriculture.
The initial implementation of the GST was not handled well – small businesses in particular
were confused about onerous reporting requirements, which placed a large compliance burden on
them. At the same time, the GST policy could be seen as one of the most important policy
initiatives since the country’s landmark 1991 economic reforms and as the one of the most
significant constitutional innovations since 1950. While the initial effect of the GST policy on
the Indian economy was a negative shock, the long-term impact is likely to be strongly positive.
3. Delivery of public goods
Modi delivered on a large number of important public goods schemes, which built on the
initiatives of the previous government. For example, toilet coverage in rural India increased from
47% of all households in 2015 to 74% in 2017, in large part due to the Modi government’s
sanitation programme. As part of the Pradhan Mantri Awaz Yojana initiative, the number of rural
houses built increased threefold from 2014 to 2016. There was also a large push on rural
electrification to ensure all villages had an electricity connection by 2018.

4. Agriculture
Around 50-60% of India’s population have some form of economic reliance on agriculture. This
sector has experienced a prolonged period of decline in rural incomes since 2011, leading to
what may has been termed an agrarian crisis.

While the roots of this crisis are deep seated, it could also be attributed to the
Modi government’s reluctance to increase minimum support prices for staple crops such as rice,
wheat and pulses – something he promised to do in his 2014 campaign. This would have
prevented the return of food price inflation, which was a major source of discontent with the
previous government.

5. Jobs
Perhaps the most disappointing feature of the Modi government has been its lack of success in
creating jobs for the large proportion of India’s labour force who are unskilled and
poor. Unemployment rose to a 45-year high, according to a leaked report from India’s National
Sample Survey Organisation.
The Modi government’s weak record in job creation was particularly surprising, given its
original intention to rejuvenate the manufacturing sector as a source of job creation, with the
much-heralded Make in India programme. Here, as in the case of agriculture, the roots of India’s
manufacturing malaise run deep. They can be linked to India’s inability to foster the kind of
labour-intensive industrialisation that has taken place in China and other East Asian countries.

The reasons for why this has been the case is complex, and can be
linked to the low levels of skills among India’s workers, poor infrastructure and India’s
antiquated labour laws. But, for all its reformist credentials, the Modi government made little
headway in providing the jobs that India’s aspirational youth so desperately seek. This could
prove crucial in the country’s 2019 national elections.